Developer can’t cancel buyer agreement unilaterally: Panel

PUNE:The State Consumer Disputes Redressal Commission has held that a builder or property developer cannot unilaterally terminate a registered agreement between him and the buyer of a flat.

Dismissing an appeal by a Pune-based builder, a two-member bench of the commission, headed by S A Kulkarni, also held on June 12 that lopsided agreements favouring the builder more and going against the provisions of the Maharashtra Flat Ownership Act cannot be legally sustained.

The matter is related to a community housing scheme developed at Dhanori along the Vishrantwandi Road by Sankalpa Constructions, a partnership firm headed by Prabhakar Bhosale and Vandana Bhosale. The company entered into the position of service provider by undertaking construction activity of small tenements for distribution among members of a particular community. It signed agreements with individual members of the scheme and registered the same.

One of the members, Haribhau J Ghode of Bhairavinagar, who filed a complaint with the Pune district consumer disputes redressal forum, was required to pay Rs 1.50 lakh remainder of the purchase amount for the tenement in the scheme.

However, citing an alleged default on the part of Ghode, the construction company issued a letter to him in 2009 unilaterally cancelling the agreement. He was also asked to exit the scheme by collecting the money he had paid till then. Ghode moved the district forum alleging deficiency of service on the part of the builder despite his willingness to pay the balance consideration.

On June 5, 2014, the district forum passed a decree in favour of the complainant. Aggrieved by this, the construction company moved the state consumer commission arguing that the decree was ex-parte and no defence was considered by the trial forum, thereby, the company lost an opportunity to contest the complaint.

In its ruling, the commission bench, which also included member Uma S Bora, observed, “Undisputedly, the company, as the builder/developer, executed a registered agreement with the requisite terms and conditions mostly favourable to them and may be against the provisions of the Maharashtra Ownership Flats Act, 1963. However, the company forgot that such terms and conditions would not hold any water if they are opposing the provisions of law.”

“Moreover, the opposite parties (the firm and its partners) are never authorized by law to unilaterally cancel the agreement and asking the complainant to get the refund,” the bench ruled.

“We see no illegality committed by the trial forum on facts and law involved in the court,” the bench held while dismissing the appeal.